Market Dynamics

• Most Network and Infrastructure companies are at pre-pandemic or higher demand. 
• Component shortages are affecting availability and lead times for orders .
• We expect component shortages will start to subside as we end 2022 and into the first quarter of 2023.
• The 2020 pandemic created a huge demand shift to work from home (remote work) and appears to have changed the way we will work going forward.
• Collaboration tools such as Zoom, Microsoft Teams, Cisco WebEx, Google, and Blue Jeans have created extraordinary demand on company network infrastructure.
• We are seeing more and more applications move to cloud-based architecture also creating demand and capacity need.
• With requirements for remote work, we have seen a shift to using AR collaboration tools. With these tools and technology in place, we are seeing faster service capability with reduced need for travel for onsite support.
• As more technology has moved and is moving to cloud, we have seen the need for tools to managed cloud and cloud spend sourced. 
• Effective and efficient use of cloud is becoming more focused with greater spend and usage.
• SDWAN design has become more important than ever to adapt with agility to changing demand.
• New technology and new players in the supplier space are important to monitor to stay competitive.
• IT & Cloud security are also in focus due to the change in architecture and remote work dynamics. 
• Ransomware is a threat to all businesses large and small, and we are seeing an increasing number of publicized cases.
• Most category managers advocate multi-source strategy with technology that easily integrates into the architecture design environments.

Pricing Situation

• We expect suppliers to raise prices in near to longer term as demand is expected to remain strong for the foreseeable future due to change in market dynamics and their core costs increasing.
• Long term pricing negotiation is best practice to lock in favorable discount structures.
• Demand planning becomes even more critical as the market dynamics are affecting lead times.
• Equipment available in non-factory order environments is seeking higher pricing and not supported by negotiated rates.

Lead Time Analysis

• We are now seeing lead times of 4 to 6 months on some network hardware on factory orders.
• Recent status of preferred customer status and ability to expedite have been removed by suppliers due to the continued excess demand.
• Availability of generic equipment within distribution channels are also seeing the effects of demand. 

Market Dynamics

• The 2020 pandemic created a huge demand shift to work from home (remote work) and appears to have changed the way we will work going forward.
• We are seeing more and more applications move to cloud-based architecture also creating demand and capacity need.
• With requirements for remote work, we have seen a shift to using AR collaboration tools. With these tools and technology in place we are seeing faster service capability with reduced need for travel for onsite support.
• As more technology has moved and is moving to cloud, we have seen the need for tools to managed cloud and cloud spend sourced.
• New technology and new players in the supplier space are important to monitor to stay competitive.
• IT & Cloud security are also in focus due to the change in architecture and remote work dynamics. 
• Ransomware is a threat to all businesses large and small, and we are seeing an increasing number of publicized cases.
• Most category managers advocate multi-source strategy with technology that easily integrates into the architecture design environments.
• Consolidation and acquisition of leading point solutions/platforms by large suite publishers require forward thinking and planning to be opportunistic and negotiate forward contract terms under potential ownership changes
• Growing concern about the security risks/threats of employees working remotely.
• The market is experiencing an increase in cyber-attacks over the past 12 months. 
• There's a need to make certain sensitive data in the cloud is encrypted.
• Large enterprise software companies began stepping up compliance audits during Covid to increase revenue.
• The rapid movement from traditional servers to cloud and digitization continues to gain momentum. 
• Large SaaS deployments and SaaS estates – Adobe Creative Cloud, Microsoft Office 365, Salesforce, ServiceNow, and Workday need to be managed.
• Develop a SaaS License Optimization Assessment strategy.
• Monitor usage to
  • Right size license assignments.
  • Liberate licenses by redeploying or terminating non-utilized licenses.
  • Defend software audit claims.

Pricing Situation

• We expect suppliers to raise prices in near to longer term as demand is expected to remain strong for the foreseeable future due to change in market dynamics.
• Long term pricing negotiation is best practice to lock in favorable discount structures.
• Demand planning becomes even more critical as the market dynamics are affecting lead times.
• Deals continue to be formed by supplier fiscal periods and sales pipeline management such as end of quarter/year sales for highest incentives.
• Deals continue to be driven by net new spend and new capability deployments as this is key for supplier market penetration.
  • It is essential to right size initial purchases and use future scalability and feature use roadmaps to drive the best deal at the point of sale and over the lifecycle of ownership / deployment (avoid "buy all" today approaches).
• Consider proof of concept / proof of performance periods with supplier funded adoption, education services and complimentary licensing to validate the business case prior to purchasing.
• Software publishers are pushing price increases with all renewals.
• Need to remain diligent in negotiating pricing discounts. 
• Utilization of third-party assessments on market pricing growing.
• Increase in Software Publisher Audits, number of companies and frequency of audits. 

​​Lead Time Analysis

• No constraints visible in market – cloud deployments are even easier.

Market Dynamics

• Planning for Windows 11 release is underway:
  • October 2021 OS had limited availability;
  • January through February 2022 expected OEM adoption; and
  • Minimum CPU capability is required and will drive refresh purchases on top of normal capacity.
• Most PC companies are still at pre-pandemic or higher demand
• Component shortages remain a constant and are anticipated through 2022 and early 2023.
• The secondary market for off-lease, remanufactured and indirect reseller product remains constrained and will become a less valuable option with Windows 11 requiring recent CPU technology.
• Baseline specifications under limited SKU approval are still being reconsidered in favor of more flexible configurations while not introducing additional IT risk.
• Tablet and convertible options becoming a secondary option to primary laptop configurations.

Pricing Situation

• Prices for OEM and direct fulfillment have been updating to 10%~ for early 2022 and no guarantee for beyond.
• Off direct fulfillment models through resellers or integrators look to be price neutral through the end of 2021.
• Recommending to still leverage single bulk purchases for improved allotment and maximum discounts with direct relationships.

Recommending to still consider OEM sponsored reseller delivery from distributed stock and assistance to mitigate off-contract pricing increases.

Lead Time Analysis

• Lead times of 4 to 5 months for direct build to order fulfillment.
• Component supply constraints and unprecedented demand for finished product continues to extend lead times. Direct purchasing and build to order relationships have highest risk due to OEM inability to stock.
• OEM direct fulfillment negotiations and preapprovals can potentially reduce lead times through allocation (OEM sponsored escalation allocations) and protected business use cases such as regulated and medical applications).
• Consider BYOD for temporary relief of new employees where work location, use case and data constraints allow.
• Consider upgrading executive class / high end units as delivery should be better than mainstream product. Decommissioned executive units can then be reallocated or put into loaner pools.
• Demand planning and advanced forecasting becomes even more critical as the market dynamics are affecting lead times.
• Consider reinforcing a lifecycle approach with leasing and decommissioning services which can be planned in advance to reduce the delivery impact and reduce costs.